Hungarian Prime Minister Gordon Bajnai gave an interview today to CNBC and spoke at length about how Hungary averted a financial meltdown in late 2008. CNBC spoke with Bajnai, the country’s interim centre-left prime minister, on Kossuth Square, right outside Parliament. The network’s reporter opened the interview by noting that the crisis in Hungary peaked just over a year ago, when interest rates rose to as high as 11 percent and when the former economic power-house of Central Europe had to turn to the International Monetary Fund, in order to obtain a $25 billion loan. At the time, Bajnai served as Hungary’s economy minister, but ascended to the prime ministership following the sudden resignation of his Socialist predecessor, Ferenc Gyurcsány, this past spring.

Prime Minister Gordon Bajnai

Bajnai observed that the worst risks of the current crisis are almost certainly over, noting that Hungary has “turned away from the edge of the cliff.” At the same time, Bajnai cautioned that the crisis itself will not end until unemployment begins to decline. Bajnai, a strong supporter of private investment and the free market, noted that the country’s most recent austerity measures and its frugal economic policy have helped revive investor confidence.

The Hungarian prime minister expects the Visegrad countries’ economy to grow by the second half of 2010. Much of this growth will come from stronger exports, which already account for 80% of Hungary’s GDP. If the country’s key markets–especially Germany and France–start to perform better, this will have a trickle down effect for Hungary as well. Bajnai believes that Hungary will be among the most fiscally prudent countries in all of Europe, noting that the government’s budget deficit will be well below the European average. The prime minister also observed that another positive sign is the fact that the value of the Hungarian forint has improved by 10% over the last six months.

Prime Minister Gordon Bajnai has indicated that he will not run in parliamentary elections to be held in April 2010 and the governing Hungarian Socialist Party (MSZP) has yet to choose a candidate.

Christopher Adam